Cornell Chronicle

Alpert says:

“The BLS’s Employment Situation report will provide the first full view of the overall severity of the COVID-19 crisis. With an aggregate of 20.85 million jobs lost through mid-April, the May survey read will likely show the loss of an additional 10.0 to 12.5 million jobs – about 95% expected to be in the private sector and about 85% of those in production and non-supervisory categories (down from 88% the month prior, as we saw culling of some managerial jobs later in the crisis).

“The unemployment rate is expected by most analysts to exceed 20%. But we caution that the U-3 headline rate will be an increasingly unreliable data point because many respondents, when asked if they were actively seeking work as of mid-May would (as last month) have responded in the negative, thus removing themselves from the Labor Force – which is the denominator of the U-3 unemployment rate – simply because there was no work to be had and no jobs worth looking for with the lockdown. Observers and media would be far better off focusing on the broader U-6 unemployment rate to get a full picture of this period. The employment-population ratio, which fell to 51.3% from 60.0% in April, will also show further declines, dropping to a likely historic low.

“As we saw in April, we will again see hourly wages and work hours ‘mysteriously’ rise for May. Really not a mystery at all, however. The layoffs and furloughs have hit low-wage, low-hour jobs, on which the U.S. economy had become so dependent, far more severely than their higher paying counterparts. The eradication of these low paying jobs leaves us with higher average hourly wages, weekly hours and weekly incomes – which in this case is not good news at all.

“Given massive social disruption caused initially by the pandemic and exacerbated by the recent events attendant to the death of George Floyd in Minneapolis and the protests evolving from that heinous act, attention should be paid to the disproportionate impact of this crisis on the Black/African American population. The employment-population ratio for Black/African Americans already fell below 50% (48.8%) as of the April BLS data, and it can be expected now to fall to post-war historic lows. It should be emphasized that this is a population of 33.3 million – 13.3% of total civilian population. Add to that Hispanic and Latino members of the population (44.0 million) which have already seen their employment-population ratio fall to 51.3% and their unemployment rate skyrocket to 18.9% (from 4.4% in February), higher than that of Black/African Americans at 16.7% (up from 5.8%). For white Americans, unemployment was 14.2% in April. This crisis is disproportionately impacting racial and ethnic minority groups enormously, a phenomenon which we expect to see worsen in the May data.”